​Gold Prices Plunge on Positive Vaccine News

WikiFX News (25 Nov.) - Gold prices traded lower to $1,825 on positive vaccine news. With the pace of redemption accelerated recently, gold prices may fall further, according to gold ETF shares.

Following Pfizer and Modena, AstraZeneca lately announced its Covid-19 vaccine, with a lower cost, could be up to 90% effective. The news has raised prospects for a faster pace of economic recovery and thus less reliance on fiscal stimulus. Since hearing the first vaccine news, gold prices have fallen over 6.5%.

According to the number of ETF shares, SPDR Gold Trust (GLD) saw redemptions outpacing subscriptions, which reflects weaker demand for paper gold.

On the political front, Biden is ready to start the transition process, marking a clearing of post-election uncertainties and catalyzing a further decline in gold prices. Besides, Biden has nominated former Fed Chair Janet Yellen as the US Treasury Secretary, a position in which she may play a critical role in influencing US fiscal and tax policies.

Gold prices have broken a key support level at $1,870 and thus may open the door for further downside potential with an eye on $1,809.

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Chart: Gold Trend